Our sound legal competence and compliance form a critical foundational platform of support at both Group and subsidiary levels. As the Group and subsidiaries develop and expand their reach, products and services, and establish new and demanding strategic goals, our Legal Division simultaneously underpins a growing portfolio of structural, operational, compliance and regulatory activities, which need to be carefully managed.

With the recent large-scale demands of restructuring into the Group Holding Company and its subsequent listing clearly demonstrating the Legal Division’s capabilities, we continued to evolve as a team during 2022, overseeing legal affairs and related developments across the Group and its subsidiaries.

The Saudi Tadawul Group’s centralized Legal Division comprises three departments; Legislation, Legal, and lastly Compliance and Governance, which itself consists of two units with one is detected for Governance and the other for Compliance together they provide services to the Group and its subsidiaries.

Results in place

A number of important developments and major initiatives undertaken by the Legal Division during 2022 deserve mention; key among them is the Governance Framework Project led by the Governance and Compliance Department together with a leading specialist consulting company. The project – of significant scale and requirement – aims to enhance the Governance Framework of the Group and its subsidiaries for a clear understanding and oversight of each other’s objectives, policies, accountabilities, expectations, performance as well as reporting requirements, to transparently and concisely communicate all such aspects to relevant stakeholders.

The Governance and Compliance Department was also engaged in the establishment and drafting of charters for a number of committees during 2022. These include, but are not limited to, Compliance committees and IT committees for all Group subsidiaries regulated by the Capital Market Authority (CMA).

At the onset of the year, the Division through its Legislations Department published 11 amended and/or developed rules and procedures related to the Post-Trade Technology Program (PTTP). The Legislation Department was also responsible for amending the Listing Rules to accommodate new enhancements of the transfer process from the Parallel Market to the Main Market, and introduced the direct listing of offered Debt Instruments by way of private placement and minor enhancements on the capital increase-related provisions. The Derivatives Exchange Trading and Membership Procedures as well as the Clearing Procedures were amended by the Legislations Department, as a result of introducing a new derivatives product (Single Stock Futures). Moreover, The introduction of the Market Making framework on the Exchange in 2022 was also supported by the Legislations Department with the development of Market Making rules and procedures.

Additionally, the introduction of derivatives required the Legal Division to work together with the Exchange to develop new templates, policies, agreements, MOUs and NDAs.

The Division, through its Legal Department, continued to provide a range of services to the Group and
its subsidiaries, including, but not limited to:

• Legal support, advice, reporting, research and correspondence;
• Litigation before all judicial and arbitral bodies;
• Leading the review, negotiation and drafting of major agreements and other legal documents;
• Identifying legal issues and proposing solutions to complex legal matters;
• Handling official judicial requests and orders;
• Interacting with external lawyers and legal consultants and with government bodies in connection with legal matters;
• Participating in committees where legal support is required;
• Performing pre-litigation work to minimize risks and protect legal rights;
• Legal support within the process of collection and settlement;
• Storing and indexing original copies of all types of agreements (except for employment agreements).

With the rest of the subsidiaries, the Division played a key role in WAMID’s acquisition of a 51% shareholding in Direct Financial Network Company (DFN). The agreement between Edaa and Clearstream during 2022 allowing foreign investors into the Saudi Market required the development of the “Instructions for International Central Securities Depositories” and related agreements. A major project in itself, touching on numerous critical issues, the Legal Division ensured a successful outcome, which remains exemplary for all concerned.

Other major agreements between the Saudi Exchange and the Abu Dhabi and Bahrain exchanges were also formalized to the satisfaction of all parties.

Of particular note is the dual listing legalization, followed by the first dual listing on the Saudi Exchange. Here too, the Legal Division provided essential services such as updating of the Listing Rules, drafting and reviewing legal documents and agreements, and negotiating and consulting in the many matters involved in dual-listing.

Resources and reliability

Supporting this expanding role, the Division has brought in well-qualified new recruits, and added a number of graduates to the Group’s highly regarded Graduate Development Program. Training of this chosen talent took priority despite the Division’s demanding workload during 2022.

Looking ahead, the Division is well-resourced to meet future challenges in legal matters in an ever-evolving landscape of legislation and regulations, to support the Group and its subsidiaries in areas requiring our professional expertise and advise.